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Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

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Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#291

Post by ITB »

poof131 wrote: post #252

The part that annoys me the most is the idea that all the depositors are mom and pop small businesses or early stage startups. I’ve heard it said that Circle and USDC have an amazing business model: create a coin, call it a dollar, and deposit real dollars in the bank for interest while customers hold the coin. You don’t even have to offer a percent for the deposit like a normal bank. You can then make a couple perce…

This is not a story of class struggle. This is about a government driving confidence in property rights.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#292

Post by DubiousPusher »

LatteLazy wrote: post #263
bradleyjg wrote: post #160

So depositors at banks taking on big risks get elevated interest rates or other perks for years, and when the shit hits the fan depositors that put their money in prudent banks get to bail them out through higher fees. And people wonder why turnout is low. There’s no way to vote for non captured politicians.

Which banks were offering elevated interest rates in the last decade?! I must have missed that memo...

Well, wealthy people weren't dumping their money into these banks above the 250k FDIC limit for no reason.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#293

Post by AdamJacobMuller »

hypothesis wrote: post #269
bradleyjg wrote: post #160

So depositors at banks taking on big risks get elevated interest rates or other perks for years, and when the shit hits the fan depositors that put their money in prudent banks get to bail them out through higher fees. And people wonder why turnout is low. There’s no way to vote for non captured politicians.

Are you saying that “no losses will be borne by the taxpayer” is worded specifically to avoid saying anything about costs to said taxpayers? /s

Of course.

If JPM and Citi et al receive a large special assessment as a result of this, where do you think the money comes from?

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#294

Post by hizanberg »

bradleyjg wrote: post #160

So depositors at banks taking on big risks get elevated interest rates or other perks for years, and when the shit hits the fan depositors that put their money in prudent banks get to bail them out through higher fees. And people wonder why turnout is low. There’s no way to vote for non captured politicians.

We banked at SVB and got 0% interest, it was just the bank recommended for Startup’s to use.

It seems the risk was not choosing a top 3 bank since no one can survive a Bank Run and the largest banks are too big to fail. Which is terrible for competition if everyone’s essentially forced to use a top 3 bank just to have confidence for your money in a US Bank to be safe.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#295

Post by lmm »

peyton wrote: post #145
grey-area wrote: post #78

Earlier quoted context omitted.

Well one way to do this would be to regulate banks more, like we used to: https://www.cnbc.com/2018/05/24/trump-signs-bank-bill-rollin... https://en.wikipedia.org/wiki/Glass–Steagall_legislation

You’re saying SVB should’ve been designated “too big to fail?”

Well, apparently they are too big to fail, given that the FDIC is covering them. So they should've been subject to the extra capital requirements that too big to fail banks have.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#296

Post by panarky »

moose_is_loose wrote: post #266
bradleyjg wrote: post #160

So depositors at banks taking on big risks get elevated interest rates or other perks for years, and when the shit hits the fan depositors that put their money in prudent banks get to bail them out through higher fees. And people wonder why turnout is low. There’s no way to vote for non captured politicians.

Yeah, shit is gonna hit the fan over this in terms of domestic turmoil. All those people who took PPP loans and Silicon Valley VCs getting bailed out who railed against student debt relief, it's just mind boggling. Just wait until student borrowers start getting squeezed and the Supreme Court nixes the debt relief. This is not good for long term political stability.

I lost money on treasury bonds when interest rates increased, where's my bailout?

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#297

Post by itake »

fwlr wrote: post #238

A lot of people are asking “how is this not a bailout?” right now. I would caution against dismissing them, it’s a legitimate question. Pointing to the “Taxpayers will not pick up the bill” line counts as dismissive: this is a press release, and it’s from the government, that’s two strong reasons for some skepticism. So, in earnest, how is it not a bailout? Feel free to offer your answer! Mine is: “Banks are required…

> the FDIC expects to recover 99% of the money

Where do you see the 99%? My understanding is the bulk of their assets (long-term bonds) dropped 30% in value. If these bonds are sold on the market, they wont have 99% of the money.

Maybe the treasury is giving them the money back of the bond?

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#298

Post by drstewart »

AH4oFVbPT4f8 wrote: post #41
noelsusman wrote: post #15

It's a bit embarrassing to have to invoke the systemic risk exception when regulations on these banks were relaxed in 2018 on the theory that they wouldn't pose a systemic risk if they got into trouble. This should spark some serious soul searching from everyone involved in that effort, but I'm not holding my breath. Anyway, I'm happy for all the depositors.

Why are you happy for the depositors? They took a risk depositing more than what was covered by fdic. to clarify, i'm happy for the employees, workers, etc that will remain employed while their company made poor decisions. My beef is that companies knowingly took risks. Would this even be an issue if all the VC companies didnt all try to pull their money out on Thur/Fri ?

Why are you happy for the employees? They took a risk working for a company that was depositing more than what was covered by fdic.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#299

Post by ldjkfkdsjnv »

reducesuffering wrote: post #247
version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

VC's and YC have burned a lot of credibility overnight with their tech employees during this mask-off moment. I wouldn't be surprised if this forum harbors long term resentment, lack of respect, and a more adversarial relationship going forward. I haven't ever seen such a large lack of respect for them as the past couple days. This industry has gone full Wall St. The next generation of individualist, regulation-disru…

The post by Gary Tan on here yesterday was actually shocking for me.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#300

Post by dragonwriter »

hnburnsy wrote: post #191
mixdup wrote: post #79

Earlier quoted context omitted.

Well, paying for it by a special assessment on banks means the banks aren't going to get a free ride. They, as a group, have to get their shit together otherwise they will pay dearly

Banks won't pay employees (lower salaries or lower increases), shareholders (lower share price or dividends) and/or customers (higher fees or less interest) will.

“Banks” are legal fictions, abstraction that serve as tools for shareholders, “Banks won’t pay, but…shareholders…will” is a fundamental misunderstanding of what banks are.
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